LKQ Corporation Common Stock (LKQ)

FairStock Score: 51/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach LKQ as a cyclical auto-parts distributor, not a wonderful consumer franchise. It sells replacement collision and mechanical parts, including salvage and aftermarket, to repair shops and insurers. Scale in North America and Europe can create purchasing and distribution advantages, but this is still a competitive, capital-intensive business with modest pricing power. The numbers confirm that: FairStock's calculation shows return on capital employed of 4.00% and return on equity of 7.13%, which are not the hallmarks of a durable moat. Financial health is mixed. Trailing free cash flow of $625.0M and an 11.1% free cash flow yield are attractive, and the 5.15% dividend yield offers something while waiting. But debt-to-equity is 0.82 and the Altman Z-Score of 1.58 signals some balance-sheet caution. Growth has turned negative. In fiscal 2025, revenue was $13.7B and net income $608.0M, down from $13.8B and $693.0M in fiscal 2024. In fiscal Q2 2026, the quarter ended 2026-06-30, net income was $136.0M and diluted EPS $0.53, versus $193.0M and $0.75 in fiscal Q2 2025, the quarter ended 2025-06-30. On valuation, the close on 2026-10-13 gives a FairStock P/E of 12.32, P/B of 0.87, and a Graham Number of $32.10, implying a 30.90% margin of safety on that conservative measure. The FairStock Score is 51/100 and the Lynch category is cyclical. My conclusion: the price is statistically cheap and cash generation is real, but low returns, falling profits, and leverage keep this in the show-me pile rather than a clear Graham bargain.

In plain English: LKQ Corporation sells replacement car parts, including recycled and aftermarket parts, to repair shops and insurers. The business is under pressure: in fiscal 2025 net income was $608.0M, down from $693.0M in fiscal 2024, and in the fiscal quarter ended 2026-06-30 net income was $136.0M versus $193.0M in the quarter ended 2025-06-30. The stock price looks low compared with its profits and accounting value, but the company makes only modest profit from the money tied up in the business and carries meaningful debt.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer